Who Benefits When Governments Build Schools?

Between 2000 and 2015, Indonesia built more than 6,000 new public high schools—enough to add over 2.4 million seats. Enrollment rose. But not everyone who gained a nearby school walked through its doors. The students who benefited most were boys from already-educated families—the ones who faced the fewest other barriers to begin with.

In the late 1990s, only about 40% of Indonesian teenagers were enrolled in high school—well below the 60% rate in East Asia and the Pacific and 49% among middle-income countries (The World Bank, 2025). The expansion targeted districts with the lowest enrollment rates, where the need was greatest.

The standard case for building more schools

The logic behind school construction programs is intuitive. Where schools are scarce and travel distances are long, young people don’t enroll. Build the school, lower the costs, and enrollment rises. If you target the most underserved districts, the gains should flow to those who need them most.

In mixed public-private education markets, there is an additional concern: will new public schools simply pull students away from private providers, leaving overall enrollment unchanged?

What happened in Indonesia

Our paper compares districts that received new schools earlier against those that received them later, tracking enrollment and private school outcomes over time.

On enrollment, the expansion worked. Within five years of a district receiving new schools, upper-secondary enrollment rose by roughly 4 percentage points—about a 12% increase relative to the baseline rate. There were also positive spillover effects: middle school enrollment rose too, as students became more likely to stay in school when they could see a path forward to high school.

Public schools didn’t crowd out private ones

This isn’t a foregone conclusion. In the United States, researchers have found that increased public school funding drives private school closures (Dinerstein and Smith, 2021)—when the public alternative gets cheaper, some families who would have paid for private school switch, and providers shut down.

Indonesia looked different. Private school construction in expansion districts did not slow down after the public schools opened—if anything, it ticked up slightly. Private school students did not score worse on exit exams either, so the private schools that stayed open kept their quality.

Enrollment gains concentrated among boys

The enrollment gains were deeply unequal across groups:

• Boys from more educated families benefited most: high school attendance in this group rose by over 6 percentage points.
• Girls saw smaller gains of about 3 percentage points, concentrated among girls from less-educated households.
• Students from disadvantaged backgrounds gained far less at the high school level.

This pattern inverts what happens at the middle school level, where school expansions tend to reach the most disadvantaged students. The difference suggests that at the high school level, barriers go beyond physical access.

Building a school nearby likely reduces costs. But it does not address the other reasons families keep teenagers—especially girls—out of school.

Why the gap?

When secondary enrollment is already low, the students closest to enrolling are not the most disadvantaged—they are the ones who face the fewest other obstacles. Boys from educated families already have the demand; the new school removes the final constraint. Girls and children from poorer households face additional barriers: family economic pressure, safety concerns about longer journeys, and social norms that deprioritize education beyond a certain level. A new building does not change any of those.

What this means

• School construction is necessary but not sufficient. Reducing physical and financial costs helps—but other barriers remain for girls and disadvantaged students. Scholarships, transport support, and community engagement are needed alongside new buildings to make sure they reach the students who need them most.
• Public expansion need not hurt private schools—especially where enrollment starts low. Policymakers worried that public construction will undermine private providers can take some reassurance: in underserved markets, there’s room for both sectors to grow side by side rather than compete for the same students.

References

• Dinerstein, M and T D Smith. 2021. “Quantifying the supply response of private schools to public policies.” American Economic Review, 111(10): 3376–3417.
• The World Bank. 2025. “Education Statistics – All Indicators (EdStats) DataBank.”